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We analyse the effectiveness of financial reforms in the transition economy of Vietnam, from the early years until the present day. Our focus is on the changes and the determinants of banks cost efficiency, which was widely criticised and was the focus of the reforms package. We find that regulatory changes impact favourably the development of the sector. Technological and efficiency improvements characterise the period of analysis, helped by better capitalisation and increased diversification. Any technological spillovers from foreign banks are quickly transferred to the domestic market, and larger domestic banks rapidly become the best performing institutions, in support of the more recent liberalisation and privatisation policies. [ABSTRACT FROM AUTHOR]

A key research question that remains largely unanswered especially in the African context is whether the macroeconomic environment and the level of financial development of a country determine the effectiveness of financial reforms. This has important policy implications. We choose Ghana as a case study and carry out an in-depth analysis of its comprehensive set of financial reforms, implemented in the 2000s, which we look at individually. We estimate a stochastic cost frontier to look at efficiency. This is then followed by two different models of competition on the loans market, the main target of the reforms. We find that only the removal of entry restrictions is significant at improving banks efficiency and that private and global foreign, but not regional banks, benefit from it. The results show, however, no improvements in competition, and reveal instead that macroeconomic and institutional weaknesses continue to exert a negative counterbalancing effect. Reforms need to be anchored on stronger macroeconomic fundamentals, institutional initiatives and generally stronger credit environments for their full potential to be revealed in the context of developing financial markets. [ABSTRACT FROM AUTHOR]